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FBR Reports First Quarter Financial Results

ARLINGTON, Va., April 23, 2013 (GLOBE NEWSWIRE) -- FBR & Co. (Nasdaq:FBRC) ("FBR" or the "Company"), a leading investment bank serving the middle market, today reported net after-tax earnings of $35.3 million, or $2.65 per diluted share, for the first quarter of 2013 compared to net after-tax earnings of $0.4 million, or $0.03 per diluted share, in the first quarter of 2012 and net after-tax earnings of $32.1 million, or $2.40 per diluted share, for the most recent quarter ended December 31, 2012.

Net income from continuing operations was $34.4 million in the first quarter of 2013 compared to a net loss of $34,000 in the first quarter of 2012 and net income of $9.0 million in the fourth quarter of 2012.

First quarter 2013 revenue was $117.9 million compared to $34.9 million in the first quarter of 2012 and $58.9 million in the most recent quarter. The Company's revenue total was the highest since the fourth quarter of 2009 and pre-tax earnings were at the highest level since the second quarter of 2007.

Compensation and benefits were 56% of net revenue during the first quarter of 2013, which compares to 51% in the year earlier period and 56% in the prior quarter. Non-compensation fixed expenses in the first quarter of 2013 totaled $11.1 million, compared to $11.6 million and $11.8 million in the first and fourth quarters of 2012, respectively.

First Quarter Overview

Investment banking revenue was $101.3 million compared to $16.2 million in the first quarter of 2012 and $44.8 million in the fourth quarter of 2012. This revenue was generated from 18 client transactions with contributions from each of our industry groups. It is important to note that included in those transactions was one capital raise which generated $38.3 million of revenue that was executed in the second quarter of 2012, but where the revenue was not able to be recognized until final regulatory approvals this quarter.

Institutional brokerage generated net revenue of $13.7 million compared to $16.1 million in the first quarter of 2012 and $12.8 million in the fourth quarter of 2012. Significantly lower market volatility during the quarter resulted in lower equity-linked product revenues versus a year ago. Equity commissions were essentially flat in the first quarter of 2013 compared to the first quarter of 2012, but importantly, were up for the second consecutive quarter.

The Company earned $2.1 million of net investment income from principal investing activities during the quarter.

A 1-for-4 reverse stock split was completed effective on February 28, 2013. Shares outstanding on March 31, 2013 were 12.3 million, and all historical per share amounts have been adjusted to give effect to the completed reverse split.

The Company periodically repurchased shares of its common stock during the quarter. For the quarter ended March 31, 2013, FBR repurchased 565 thousand shares at an average price of $16.16 per share. Since the second quarter of 2010, the Company has repurchased 5.3 million shares at an average price of $13.08 per share, for a total of $69.2 million. The Company continues to have authority to repurchase 928 thousand shares.